International Marketing: Samsung's Market Entry and Brand Marketing Strategies in USA and Thailand

This report discusses Samsung's market entry strategy in USA and Thailand, market segment strategy, brand marketing, value chain framework, and key challenges faced by Samsung in these two countries.

INTERNATIONAL
MARKETING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
SECTION A.....................................................................................................................................1
Market entry strategy of the Samsung in USA and Thailand ................................................1
Market segment strategy in USA and Thailand.....................................................................2
Brand Marketing in two countries. ........................................................................................4
Value chain framework adopted by Samsung........................................................................5
The key challenges faced by Samsung in these two countries..............................................6
Marketing mix used by Samsung ..........................................................................................7
SECTION B ....................................................................................................................................7
Strategies used by Samsung for global standardization.........................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Appendix .......................................................................................................................................12

INTRODUCTION
Marketing in simpler term can be described as the way of understanding and identifying
the need and demand of consumer and creating the goods and services that can satisfy them. But
marketing does not only end there; it also includes pricing, promoting and delivering those
goods and services. For current report, Samsung group has been taken into consideration. This
firm is working in conglomerate industry. In current time, it has become one of the leading firm
in electronics and its world’s 2nd largest information technology firm. Here, in particular the
report will talk about Samsung tab S3 as the company has grabbed the second place in the world
tablet market share by covering 13.7% in the year 2015. Apple was ahead of the firm by only
10%. The firm is growing at a fast rate; America, Europe and Asia-Pacific are its leading
revenue generator area. Alone America accounts for 47.7% of total market value in the year
2010. However, the firm has adopted demographic segmentation in their strategy as they try to
target people of different age or income classes so that they can provide the best product to all
age and class. The company is selling their product all over the world and is growing at very fast
rate. In the given report, it will discuss the marketing environment of two host countries in which
firm is operating and will provide with different strategies that can help in the growth of the
firm.
SECTION A
In this report, Samsung Galaxy Tab S3 has been taken into account. With the increasing
in the production and sale of the tablet, it has been acquiring the place of smartphone (Appendix
illustration 6). The marketing situation of this product in USA and Thailand will be studied in
detail.
Market entry strategy of the Samsung in USA and Thailand
Samsung is one of the leading brand of smartphones in America and Thailand. In order to
enter the market and establishing their firm in this nation, it is necessary of the firm to select the
best method that can provide them with maximum profit (Hadjikhani, Lee, and Park, 2016).
There are many ways through which an entity can enter the market of its host country such as
licensing, franchise, joint venture, strategic alliance etc. However, joint venture is one of the
major mode on which the cited firm relied so that it can enter new market. The firm as adopted
this mode of entry to enter the market of America. Joint venture can be described as the jointly
owned firm under two independent firm owners (Lee, 2014). This helps firm in reducing the
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high risk of instability and failure which come with entering in new market. By using the joint
venture with other companies, it helps them in overcoming restriction that come with ownership.
It also helps them in decreasing cultural distance by combining the resources of both companies.
This provides Samsung a chance and potential to learn about their host country and people also
view them as insider. The tactics of joint venture is not only used at the time of entry but also at
other times which help them in expanding their business. For example, in the latest time,
Samsung has created a joint venture with Venezuela's government which will bring many
benefits toward the firm. This type of entry not only reduces the risk but also requires less
investment (Ying, 2016). It's not the only method that firm has adopted, the choice of method
relies on the host country and the environment. In order to enter the market of Thailand, the firm
had decided to adopt strategic alliance as their way to enter the market. In this type of
management strategy, both the companies are mutually benefited (Jensen, 2017). With the help
of strategic alliance, the firm has formed various partnership with many leading companies
outside South Korea. The main reason for selecting this strategy was that it provides the
organisation with immediate entry in the market of Thailand and also reduces the risk to half.
With the help of the given strategy, the firm was able to find stability in this market at very fast
rate.
The major reason for selecting the joint venture as the mode of entry in American market
was that the risk was very high in this market with the increasing popularity of Apple and other
already established companies. By choosing this strategy and dividing the risk with other parties,
it increases its own survival chances. The major difference between these two is that while in
joint venture a whole new company is formed under two firms, strategic alliance is a legal
agreement where two companies share access to each other’s assets, trademark, technology etc
(Park, Yoon and Kim 2013). The reason for selecting the strategic alliance to enter the market of
Thailand was because it provides the firm with immediate entry in this new market.
Market segment strategy in USA and Thailand
Market segmentation can be defined as the way through which the firm divides or groups
their customer on the basis of the needs, interest and attitude. The cited firm mainly focuses on
the lifestyle and demographic variable while they are segmenting their market. But with time, it's
focusing more on changing lifestyle of the people and younger generation so that it can cater the
need of this ever-changing market. The wide range of the products is one of the major reason for
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the growth of the cited firm (Chang, 2015). However, the firm is known for its varied range of
product and prices that help them in attracting the customer of all income groups.
In order to attract the customers in Thailand, the firm is focusing more on geographic
segmentation. The firm has divided their target audience on the basis of region area that is rural
areas and urban areas; for the people of rural area, it has come with GURU segment while for
urban people, galaxy segment has been launched. It helps them in catering the need of all people
and increasing their customer base.
Other than this, it also focusses on language and culture barriers. The program between
Asia and western market may vary. On the basis of demographic segmentation, the corporate
focuses more on the age and businessman, it tries to produce the product that has maximum
features at lower price so that it can attract university student and young generation (Chiu Chung
and Yang, 2016). The firm also produce tablets that are quite efficient for the business people,
the tablet Galaxy tab S3 has become leading choice of business people.
Other than this, it also focuses on psychographic segmentation; according to this
segmentation, it focuses on the lifestyle of the people. According to this, people choice depends
upon their lifestyle for example., it has come up with the product especially for sports person
which measure their heartbeat or step count. Whereas quality speaker is always welcomed by
music fans. Other than this, it also considers behavioural segmentation while targeting their
customers in which it questions how often a person uses his cell or any particular app. The firm
focuses on different segments in the different countries.
Thailand is a developing country with moderate economy, though the country is
developing at a very fast rate, it still affects the market. In order to find sustainability in this
market, income has become major segment. The firm is developing varied range of product to
people at lower price. As the main target audience for the product like galaxy tab S3, the firm is
targeting the upper-class people and business people of the nation (Brueller, Carmeli and
Markman, 2016).
In developed country like America that has great economy which lead to high
purchasing power, the firm focuses more on psychographic segmentation that focus on the
lifestyle of the people. It tries to come up with the product that can meet the demand of this fast-
moving society. With its wide variety of product that meet the need of many people along with
its flexible prices, it has made one of the leading smartphone and tablet product in the USA, the
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samsung product Galaxy Tab S3 has become choice of many people not only it was able to
attract the attention of young generation but many professional also find it quite convenient. It
has been forecasted that by year 2020, the commerce market of Samsung tablet will reach to
$173 million (Appendix illustration 6). It is not only these two countries in which the firm is
developing but also in many others. It has become one of the leading mobile company in the
world as in the year 2016, the share of global smartphone market of Samsung had beaten all
other companies including Apple (Appendic illustration 7). The market segmentation plays an
important role in this. From the above discussion, it is very clear that the firm uses various
segmentation so that it can reach the larger audience and adapt themselves the best in order to
meet the demand of these people. It helps them in becoming one of the leading smartphone
company in the world.
Brand Marketing in two countries.
Brand is one of the most valuable intellectual property any business can have. It not only
represents the identity of firm but also present and enhance your culture and play major role in
extending the value proposition of the firm. Moreover, brand plays an important role in the
success of the firm. From the time of its establishment, the firm is finding different ways through
which it can promote its brand (Armstrong and et. al., 2015). The reason why the firm focus on
brand is that where advertising stop making the product more desirable than of the rivals, brand
help firm in establishing the product as the first name that came to the mind of customer when
they think of that product group. Samsung has its own strategy to promote its brand in the
various countries. Samsung realizes that in order to gain the recognition in new market they need
to have intensive advertising or a product that is unique (West, Ford and Ibrahim, 2015). The
firm faces strong competition in America from the Apple, in order to become one of their
leading rival it has adopted innovation as their main tool other than this in order to create
awareness among people Pricing and advertising has become one its major tool.
In Thailand the firm try to produce the product that provide variety of function and
features at much lower price. While in America it focuses more on the quality of products. The
firm realizes the importance of the advertisement and do not hesitate in spending a big amount
on that. It has been recorded that among its competitors its Samsung that invest largest among
on advertising it product. Their strong advertising strategy help them in becoming one of the
leading competition of Apple Inc. in America.
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The reason behind the success of the brand in Thailand is their pricing strategy.
Differentiation is the key that make a brand more preferable. In current time where there is high
competition in the market. The firm has make its unique position for providing their customer
with quality product at reasonable price. The firm focuses on reducing its operational price so
that it can provide customer with reasonable price which help them in gaining higher profit from
its premium product (Nagle, Hogan and Zale, 2016).
Value chain framework adopted by Samsung
Samsung has adopted analytical framework of value chain that help them in identifying
business activities that help them in providing competitive edge and create value in electronic
company. The firm has more than 500 suppliers globally the majority of Samsung suppliers are
based in Asia that is 79.4 % that is followed by America that is 14.8% (Samsung value chain
analysis. 2017.)is help them in producing quality product in both nation that is America and
Thailand. Samsung has more than 38 production bases in more than 17 countries in the world.
The firm manufactures more than 90% of its product within the firm. The sophisticated
operation system and advanced technology help firm in adding value to their products. Although
Apple is acknowledged as pioneer in the field of the smartphone that is known for introducing
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Illustration 1: Samsung advertising expense
(Source: The cost of selling galaxy 2012)

modern features and smartphone but Samsung has emerged himself as one of its leading rival
that is exceptionally quick in launching its own product that can compete in the market.
Effective outbound logistic operation help the firm in delivering updated product to their
customer in time (Van Alstyne, Parker and Choudary, 2016). The company understands the
importance of advertisement in advancing the function and capabilities of the product. Samsung
marketing budget in 2016 was amounted to USD 10.2 Billion, in which USD 3.9 billion
(Samsung value chain analysis. 2017) was spent on advertisement expense. An effective appeal
that help firm in bonding with their customer at emotional level help the firm in creating value
for the Samsung marketing. The firm believe on delivering their customer with the highest
standard of services. The firm conduct the survey on the satisfaction of the customer that help
them in maintaining this standard.
The key challenges faced by Samsung in these two countries.
The challenge of high competition in America and Thailand.
The Samsung is one of the largest vendor of smartphone with market share of 30.2 % in
Q1 of 2014 (Samsung business face challenges 2014). But in recent time the market share of the
firm slipped by 1% year by year making its first decline in 4 years. The reason behind this
intensifying competition in the market of smartphone and tablet especially in emerging countries
like Thailand. Manufacturer like Huawei, Xiaomi, lenova etc. has launched product with high-
end specification with low process that has been creating its place in budget conscious people,
leading to decrease in the sale. Apple that is primary competitor of Samsung in high end area has
been getting more aggressive the company has decided to launch big screen I phone that has
been the biggest beneficiaries of Samsung. This has increase the threat on the Samsung in the
market of America.
Operational inefficiency
The firm faces big embarrassment when its flagship galaxy Note 7 smartphone batteries
start exploding. The firm has replaced the phone and had provided them with other phone set but
soon the replaced phone also start bursting, the situation got so much worst that they have to stop
the production and sale of Note 7. It does not only affect the profit of the firm but also have
major effect on the brand image of the firm (Appendix illustration 5). In addition to it, the arrest
of the heir of Samsung regarding the bribery has acted as the oil in the fire (Jung, 2014). As we
have discussed before it has major impact on the brand image of the firm. The corporate is
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facing major issue because of this in addition to it high competition both high and low end has
make situation much worse for the entity. The trust has become major issue that is faced
Samsung not only from the side of customer but also stakeholders.
Marketing mix used by Samsung
In current time where customer are so fickle and shop in the zigzag line, the firm relies
on the strong marketing strategy to retain their customer's. Marketing mix is one of the important
tool that is adopted by the firm in order to attract customer toward them.
Product: The firm believe in producing a product that can meet the demand of customer in order
to do so Samsung invest enough amount in the research and development so that they can meet
the demand and need of the customer (McKenna, vd Leye and Fichtner, 2016). The firm is also
known for producing wide range of the product that can meet the need of all type of people.
Price: Price in the simple words can be defined as the amount that is paid by the customer for
the product. Its necessary of the firm to select appropriate price which can help them in attracting
the customer. Samsung has adopted two pricing schemes that is skimming. In which at the time
of launching the firm put high prices on the product and reduces it when competitors release the
product with similar feature it helps them in preventing the reduction of its in market share.
Place: Samsung has the strategy of selling their product directly to the retailers or service
dealer . In particular location it also uses single distribution strategy to sell their products.
Promotion: The firm believe in advertising as the best form of promotion and invest a lot of
money in this it helps them in creating awareness among customer. It helps them in engaging
potential customer toward the firm and creating better brand position (Fettweis, 2014). The firm
uses digital media and newspaper as their main way to introduce their new product in addition to
this it also uses the popularity of celebrities to promote their product.
SECTION B
Strategies used by Samsung for global standardization
Apple has adopted different strategies of local adaption. One of the major strategy that it
has adopted is that of its distribution channel. As we have discussed before the firm has selected
to sell their product direct to retailers from whom customer can directly buy their product. It has
been suggested that it's the best method through which firm can supply their product to their
customer. It helps firm in reducing the extra price that is spent on distribution if the firm also
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include whole seller in their process. It helps firm in reaching their customer at much faster
speed.
This strategy help Samsung to sell their product directly and indirectly to customers,
which provide them with the ability to quickly expand and saturate the market with their
product. The world bank has recorded the growth in the GDP of Thailand that shows the
constant growth in the GDP of the nation compare to other nations. (Appendix illustration 2). It
has been predicted that the number of internet user will increase (Appendix, illustration 3) It
shows that shopping style of people is changing and they are preferring to shop online more.
Samsung current distribution channel is quite effective and will bring more profit with the
changes in economy.
The direct distribution strategy of Samsung come with many benefits, the firm has direct
control on their product distribution that help them in decreasing their distribution cost. With the
help direct distribution they can form proper communication with their customer which will help
them in providing better services to the customer (Paksi and Gunawan, 2017). With the help of
indirect distribution the firm will be able to overcome the problem of geographical reach in
direct distribution.
Samsung in order to increase it presence in America is focusing more on their
relationship with their partners. In recent time the channels of the firm in country is divided on
the basis of the regions and products line. Samsung is making an effort to bring more partners in
working with them so that they can expose more opportunity of channel that come with new
partners. This help firm in reaching various part of America and supply their product to them.
“Samsung Team Of Empowered Partners” is the initiative taken by the Samsung in order to
improve their distribution channel in America (Channel of distribution 2016). The main aim of
this program is to consolidate available resource and simplify the accessibility of partners so that
they could reach the far and vast area. The firm is not only known for investing in innovative
product but also in innovative program that help them in achieving high success and sharing it
with their partners. The aim of this program is to expand its seller network in the region of North
America market with the help of launching recruitment campaign to the available 13,000
partners. The firm paid special attention on it channel sale approach and continuously look for
the way through which it can improve.
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These strategies of Samsung has helped them in establishing their market in international
market and emerging as one of the leading firm of current time. This strategy has not only
helped firm in becoming leading firm in the market of electronic tablet in this two country but in
whole world. In the electronic market of US the entity is responsible for the 30% of market
coming 2nd to the Apple but in the world market Samsung leads the position with 22% of market
share (Appendix ).
CONCLUSION
From the above report it can be conclude that merger and acquisition has played
important role in the establishment of Samsung in global market. With the help of this strategy
Samsung was able to reduce the risk which come with the entry in new market. The firm have
adopted demographic segmentation in their working according to which they produce their
product while keeping in the needs of young generation along with this they also paid attention
to the business people tablet S3 is especially designed for the business purpose. In America the
firm has adopted the psychographic segmentation according to which it put more focus on the
lifestyle of people. Brand play important role in creating positive perception of company in the
eye of the firm. It pays extra attention on their advertisement and pricing strategy along with this
it also pays attention to the quality of product. With high competition and in effective operation
system is increasing the threat on the firm. The distribution strategy of the firm has helped him
in his success.
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Appendix
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samsung global tablet shipment graph
13
Illustration 2: internet user in Thailand
(Source: Thailand internet user. 2017.)

14
Illustration 3: Samsung market share in world.
(Source: Channel of distribution. 2016)

15
Illustration 4: Decrease in the sale of Samsung
(source: Decrease in Samsung tablet sale 2017)

16
Illustration 5: Mobile commerce in coming years.
(Source: Mobile commerce in coming years. 2016)
Illustration 6: Smartphone brand in 2016
(Source: Smartphone brand ranking in 2016)